In the context of the more volatile world economy, the US-China trade war is exerting substantial impacts on the world economy. Vacation property investment harbors numerous risks although the market has still fared well in the past half year.
Investment trends in 2019 are clearly shifting as many investors are aiming for megacity or multi-complex projects covering hundreds of hectares each. These urban areas are planned quite clearly with closed, synchronous and highly liquid ecosystems.
According to experts, multi-complex projects are created and developed to serve modern busy people in Vietnam. This trend is believed to be inevitable in the real estate market where investors now no longer buy individual apartments or villas but they will buy overall experiences, including space and utilities.
Nguyen Manh Khoi, deputy director of Housing and Real Estate Market Management Department, Ministry of Construction, said that the vacation property market still has much room for growth toward the end of this year thanks to following reasons:
First, leisure demands are increasing in both Vietnam and the world.
Second, in addition to holiday travel, Vietnam has also gradually formed some new tourism models such as medical tourism that has resulted in the presence of high-class hospitals, MICE, spiritual tourism and shopping tourism. These tourism products are being developed strongly in Vietnam.
Third, legal procedures for tourism property are clearer than before. However, current regulations are still incomplete and unclear.
Fourth, vacation property advantages are huge in many localities. Many are holding conferences to court investors to invest in vacation property.
Fifth, the government still considers tourism a key economic sector to which the government has always paid special attention, aiming to improve property quality and supplies.
Khoi said that, in the near future, the vacation property market will be more diverse, especially in potential provinces. Vietnam has four types of tourism: Sea, river, mountain and hill. Each type has an advantage. However, in the short term, sea-based property in emerging markets such as Binh Dinh, Phu Yen, Ninh Thuan and Binh Thuan provinces is still catching investor interests. These localities have large land funds and developed infrastructure and seek investors.
Tran Dinh Thien, member of the Economic Mentors Council to the prime minister, said that Vietnam’s tourism market has reaped very positive achievements in recent years and this will also exert strong impacts on the vacation property market. As Vietnam is being seen as a reliable destination for investors, investment flows into Vietnam may increase and create huge demand for the real estate market.
He forecast, “Vietnam’s property markets in big cities and vacation property markets will receive great attention from investors in the near future, especially when Japanese investors tend to shift their interests from industrial property to tourism property. Therefore, this segment will still draw great interests from international investors in the future.”
In another aspect, economic expert Nguyen Tri Hieu said that the world economy is showing signs of uncertainties amid escalating US-China trade war. When the world is in difficulty, some products will be affected, including tourism. For that reason, vacation property will be a high risk segment in the context of global volatility although this market has fared quite well for the past half year.
According to many experts, although the vacation property market still has huge potential, it also still faces numerous hardships such as slow completion of legal status for this type of property and limited investment capital. Besides, the massive development of this segment has raised concerns about project quality, investor reputation, high product price and operational performance of projects.
